Local motorbike dealers report slower sales as the falling property market and declines in foreign investment hit consumer spending at home
Photo by: Sam Rith
Motorbike shops along Sihanouk Boulevard near Olympic Stadium. Dealers report slower sales compared to last year.
THE global economic crisis and a weakening property market have hit local motorbike sales, with dealers reporting drops of as much as 70 percent this year.
"Last year I did not have enough motorcycles to meet demand, and a lot of customers booked their vehicles in advance. But this year I have a lot of remaining bikes in my shop," said Chhay Ly, owner of Chhay Ly Honda Motorcycle Shop on Kampuchea Krom Boulevard.
He said his profits have nearly evaporated and he now sells only four or five bikes per month, at US$980 to $2,300 each, down from about 12 last year.
"The drops are caused by the slow economy," he added.
Motorbike sales soared last year and in the first half of 2008 as Cambodians cashed in on the strong property market and record foreign direct investment.
But with the economic crisis spreading to local markets and property values in freefall, motorbike dealers are feeling the pain of consumer belt-tightening.
Principal form of transport
Motorcycles are the Kingdom's most common form of transport, and the government says that 800,000 bikes are registered in the country.
This year has been very quiet. Last year, a lot of people bought bikes at my shops.
"This year has been very quiet. Last year, a lot of people bought bikes at my shops - most were people who made money from selling their land outside of Phnom Penh," said Chhim Neang, owner of Chhim Neang Selling Motorcycle Shop. She reported a 40 percent sales drop, which she blamed mainly on the property market.
Keo Rottana, director of MCT Motorcycle Manufacturing (Cambodia) Co Ltd, which is a wholesaler of electric bikes, all-terrain vehicles and small electric cars from China, said his sales have dropped significantly, even after he cut prices from $600 to $550 each.
"We have seen a lot less buy orders from the provinces."
He said last year his company sold about 2,000 units, but this year sales dropped about 30 percent.
Another wholesaler, Pok Phalra, director of JM Japan Motorcycles Shop, said he has sold virtually no second-hand motorcycles imported from Japan.
"This year, sometimes I sell one bike and sometimes none," he said. "Last year I could sell up to eight bikes per day."
Cheng Song Heap, owner of Cheng Song Heap Motor Shop, a major motorcycle retailer in Phnom Penh, also said he has been affected by a drop-off in business.
"People are now depending on their salaries. They are not seeing large profits from land sales like last year."
According to a local property expert, the real estate market may not recover any time soon.
"It takes about one to two years before land prices will return to normal," said Sung Bonna, director of Bonna Reality.
Finance Minister Keat Chhon confirmed early this month that Cambodia's economic growth would slow to 6.5 percent next year.